SEOUL (Reuters) – South Korea’s top court is due to rule on Tuesday on a damages lawsuit against a Japanese company filed by South Koreans forced into labor during Japan’s 1910-45 occupation, a decision that could unsettle ties between the uneasy neighbors.
Japan and South Korea share a bitter history that includes Japan’s 35-year occupation of the peninsula and the use of comfort women, Japan’s euphemism for women – many of them Korean – forced to work in its wartime brothels.
Four former laborers initiated a suit in 2005 against Nippon Steel & Sumitomo Metal Corp., seeking compensation and unpaid wages.
Previous cases they had brought in Japan were dismissed on the grounds that their right to reparation was terminated by a 1965 treaty normalizing diplomatic ties.
But in 2012, South Korea’s Supreme Court ruled that the company should compensate the plaintiffs.
The company has appealed a 2013 order that it pay 100 million won ($87,900) to each of the four.
“We might have to brace for not only a diplomatic crisis but a pull-out of some Japanese firms and a fall in new investment,” said Shin Beom-chul, a senior fellow at Asan Institute for Policy Studies in Seoul.
Japan’s foreign ministry said the issue of compensation was “settled completely and finally” by the 1965 deal.
A spokesman at Nippon Steel told Reuters: “We believe the court will rule in our favor.”
If the court upholds the order that the company pays compensation, the former laborers could request a seizure of Nippon Steel’s property in South Korea, which could lead to an international arbitration, said Jin Chang-soo, president of the Sejong Institute think-tank.
South Korea’s foreign ministry said in 2016 any seizure of company assets could drive relations into an “irreversible catastrophe”.
“It’s possible that the case will escalate, stoke anti-Japanese sentiment here and spill over into other areas including security at a time when we need to closely work with Japan to resolve the North Korean nuclear issue,” Jin said.
